Huawei Engages in Legal Battles Over U.S. Allegations

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Huawei Suing United States

A reported Intellectual Property (IP) theft of American company T-Mobile was only the beginning of the accusations against Huawei Technologies Co., Ltd.

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Huawei is a Chinese manufacturer of multinational telecommunications equipment and consumer electronics. Espionage, fraud, and inefficient security are only a few of the problems that Huawei is facing as countries around the world are beginning to distrust the the company.

The First Indictment

In 2013, T-Mobile created a phone testing system called “Tappy,” which was used to test for glitches or other software issues in a phone before it launched on their network. Tappy proved to be a success as the total number of customer returns decreased. However, it is this success that attracted the USA branch of Chinese phone maker Huawei.

The Huawei China location designs and manufactures wireless phones while the Huawei USA location sells and distributes their products stateside. Due to Tappy’s success, Huawei USA partnered with T-Mobile to use the machine to test their own phones. This came about after Huawei agreed to sell their devices to T-Mobile. As the relationship between the two companies thickened, it also became more complicated.

T-Mobile agreed to let Huawei use Tappy to test their own phones. However, T-Mobile prohibited Huawei from taking photos, reverse-engineering the hardware, copying any software codes, or circumventing any security measures that prevented unauthorized access. This agreement did not last long as the Huawei USA workers who used Tappy were accused of sending details on the size, functionality, and overall performance of the machine back to Huawei China. They were working on perfecting their own version of Tappy for themselves.

On January 16, 2019, the United States filed an indictment against Huawei for theft of trade secrets. They denied the claims that they stole the technology and continued to push forward in the technology industry.

Exposing More Lies and Banning Technology

To further their development, Huawei China was one of the first to present new 5G-compatible equipment. President of the United States, Donald Trump, accused the company of having an insecure network and urged other countries to cease commerce operations with them. Trump incited a widespread fear that the Huawei phones would be programmed with the ability to spy on Americans.

In addition to the 5G device issue, evidence pointed to Huawei committing fraud in their relations with Iran. The accusations came about after Meng Wanzhou, daughter of Huawei’s founder, was accused of using a subsidiary called Skycom to evade sanctions on Iran. She made it appear as if Skycom was a separate company when in fact, it was an extension of Huawei. She allegedly used Skycom to obtain otherwise prohibited U.S.-origin goods, technology and services, including banking services for Huawei’s Iran-based businesses. These business practices went against the previously imposed Iranian Transactions and Sanctions Regulations.

Worldwide Reactions to Company Credibility

Countries around the globe have been considering whether or not to allow the Chinese-based company to sell products in their countries. Germany ministers met to discuss a ban on Huawei’s new 5G devices. Meanwhile, Poland arrested a Huawei employee and Australia banned the Chinese-based 5G because of national security concerns.

Contrary to the United States of America and other countries who are banning the phone manufacturer from doing business within their borders, a United Kingdom carrier called BT finds no security issues. BT says they have not seen any cause for concern during their years of partnership.

Huawei’s Response

America put forth a National Defense Authorization Act which not only prohibited federal U.S. agencies from buying their products, but also from awarding loans to buy their products. In response, the telecommunications giant struck back against the U.S. government by filing a lawsuit.

The lawsuit argues that a ban on federal agencies and contractors using their products is unconstitutional. Their main claim is that Congress has failed to provide sufficient evidence to back up their claims and did not allow the company due process of law. They are aiming to get a permanent order against the restrictions.

How to Protect Against Security Threats

SecureForensics specializes in protection of theft of trade secrets, employment investigation, and fraud investigation. Our experts can analyze your systems to find court-admissible evidence to help you prove your court case. We can find the people involved in the illegal activity and protect your business’ data and reputation. Call us at 1-800-288-1407 for more information.